*Updated* MN advancing law that would ban the requirement of HOAs for new developments. Iowa does the opposite.

[chuckd4735]

Updated: I forgot to add the bill would also remove city council approval for new developments *IF* the comprehensive plan and zoning districts permit the development. The rational is the city already agreed to housing in certain areas through the public review process, so adding additional council review increases time and drives up cost. The bill would mandate an administrative review process.

The Minnesota Legislature is advancing a bipartisan bill (SF1750) that bans cities from requiring commonly-owned lots in new developments in order to force the creation of an HOA for that development.

The rational is that HOAs limit the construction of new home and raise prices and monthly costs for buyers.

In Iowa, most cities require an HOA for ALL new developments. You cannot build a new subdivision without an HOA in all parts of the DSM metro. The HOA is then required to maintain storm water ponds, drainage, etc. HOA boards are not filled with engineering professionals, so it's a terrible position to put homeowners in.

What are your thoughts?

As a former City Planner now in City Management, I don't mind removing the political side of subdivision review, and agree that the Comp Plan and zoning dictate this. However, in most cities I have been in, the administrative review is where the bulk of the approval time is spent. Once it gets to the Council level, it goes quick. However, that is also dependent on the NIMBY folks.

As far as HOA's, there is so much common area anymore that needs to be maintained. If you cant force that on an HOA, than either the City is going to have to do it (which means the entire tax base pays for it) or you require those areas to be sold with individual lots (which means a single owner pays for it). Not sure the best route here, but I would guess most developers are still going to choose the HOA route, even if the City doesn't force it.

 

[Cyched]

Ok, storm water ponds, are they just a pool of rain runoff?

Yes - they're designed to restrict rainwater outflow to the rate it was pre-development. Paved surfaces have a higher runoff rate than grass/land. The pond holds the excess runoff to mitigate flooding during a big storm.

 

[TrailCy]

As a former City Planner now in City Management, I don't mind removing the political side of subdivision review, and agree that the Comp Plan and zoning dictate this. However, in most cities I have been in, the administrative review is where the bulk of the approval time is spent. Once it gets to the Council level, it goes quick. However, that is also dependent on the NIMBY folks.

As far as HOA's, there is so much common area anymore that needs to be maintained. If you cant force that on an HOA, than either the City is going to have to do it (which means the entire tax base pays for it) or you require those areas to be sold with individual lots (which means a single owner pays for it). Not sure the best route here, but I would guess most developers are still going to choose the HOA route, even if the City doesn't force it.

Take out storm water ponds and any private playgrounds and what common areas are you referring to? And are those common areas owned by an HOA due to city regulations or is there an engineering reason to have these outlots?

 

[chuckd4735]

Cities should 100% be responsible for this…for ownership, maintenance, and repairs of such land. What you’re suggesting (I think) is that there could be land that is the HOA’s responsibility, but there is no one set up to maintain that land…and no funds to do it. Then if there is a problem, all members of the HOA would be approached with a bill for repairs. No way. Let the city do it. That’s what property taxes are for…that’s why city managers have jobs. If they need to raise taxes, so be it.

But cities are funded by the entire tax base. So what you are saying is that every citizen in a City should pay for improvments in a single subdivision, rather then just the citizens within that subdivision paying for things in their subdivision. I'm not saying I disagree with you, but Cities get their money from every citizen that lives in the City.

 

[chuckd4735]

Take out storm water ponds and any private playgrounds and what common areas are you referring to? And are those common areas owned by an HOA due to city regulations or is there an engineering reason to have these outlots?

There really isn't more than those areas. Ownership is tough...it really comes down to how the ownership/funding is decided. If you put it on an individual lot, most people will never buy that lot. If you can split the costs between an entire development, then its easier to digest. If you require the City to maintain, they people living in the far NE corner of a City are potentially paying for things in the far SW corner of the City.

 

[cybychoice]

You’re just jealous that you don't have a RV.

You’re right, I wish I had the disposable income to buy a 100k vehicle and let it sit unused 350 days a year.

 

[drmwevr08]

Couple things
1- State legislation is frequently written by someone with an ax to grind or a profit motive.
a-its usually written poorly
2-People have a relatively dim idea of how code compliance works, let alone HOAs
a-HOAs can definitely be worse because they lack the oversite that a code compliance officer has

Always fun seeing people's thought on this though!

 

[aauummm]

This is why storm water ponds under HOA ownership is a bad idea. HOAs can sunset, and then the land is owned by a non-existent entity. If work needs to be done the city will go in and do it anyway, so you're creating a problem for the future with almost no benefit.

I can see where that would be a problem if that were to occur. In our subdivision the developer put a park in the middle of it and it was deeded to the city when the subdivision was platted. So the city had the responsibility for it upfront and didn't have an awkward situation 30 years down the road.

 

[chuckd4735]

This is why storm water ponds under HOA ownership is a bad idea. HOAs can sunset, and then the land is owned by a non-existent entity. If work needs to be done the city will go in and do it anyway, so you're creating a problem for the future with almost no benefit.

A lot of cities will still maintain easements on this where if the city has to go in and do maintenance, they can access the costs back onto the property owners in the development.

 

[TrailCy]

There really isn't more than those areas. Ownership is tough...it really comes down to how the ownership/funding is decided. If you put it on an individual lot, most people will never buy that lot. If you can split the costs between an entire development, then its easier to digest. If you require the City to maintain, they people living in the far NE corner of a City are potentially paying for things in the far SW corner of the City.

In this case, define "maintain". If it's so onerous and frequent to cause tax increases, how can professional city engineers expect laypeople to manage this maintenance? If the HOA doesn't "maintain" it or the HOA sunsets the city will go in anyway. It seems like cities are speaking out of both sides of their mouth here; either maintenance is so challenging taxes will go up or it's so easy to maintain any ol' Karen can do it through a biannual HOA meeting.

Also, street repairs are often paid for by collective city funds so the SW resident is paying for the NE repair. What is the difference? Isn't clean storm water runoff a community concern?

What I would like to know, in all seriousness, is how MN cities can own and maintain these storm water ponds and still have cheaper property taxes than Iowa? And it's not like cities simply accept them, they actually *want* them.

 

[alarson]

I feel out of place in this conversation. Our HOA dues cover what they are supposed to (park maintenance, garbage pick up, wastewater, snow removal) and doesn't infringe on our rights. There are some minor restrictions to prevent someone painting their house bright pink or something, but I've never had an issue with getting any construction or home repair approved easily.

A lot can depend on the bylaws of the HOA as to what the HOA has rights to enforce. Plenty of HOAs are completely benign like you mention and overall good for the neighborhood.

The bylaws and rules and regulations are also generally available for anyone when going through the purchase process. Review those and decide if you are comfortable with those.

Also, if you're past that point, most HOA annual meetings have pitifully low attendance. This is how you get some of the more annoying types on these boards. (I'm involved in one for a condo I rent out, I think there were 5 people in attendance including the 3 board members). However, it also means that it doesn't take many votes to put someone more reasonable in if you get a few neighbors together and vote one or more of yourselves onto the board.

 

[CY88CE11]

The city has an easement to maintain it if the HOA does not, correct? So they're still ultimately responsible for it anyway. Also, if professional city staff cannot manage "maintenance" how can a volunteer group of non-professionals? What specific "maintenance" needs to be done by a city on a regular basis that would require hiring more staff? You either have trash in the outlet or there are significant grading concerns. If there are significant grading concerns Karen at the HOA is wholly unqualified to manage the work.

Correct, the City will have an easement to be able to do the work, but they'll assess that cost to the homeowners of the HOA, per the maintenance agreement.

Because the HOA doesn't really manage the work unless they have the ability to. The HOA is there to divvy the financial responsibility between the homeowners. Detention basins fill in with sediment over time, which decreases their capacity and functionality. A common maintenance task is to dredge out that sediment every do often. There's also scouring at outlets that can be an issue to deal with.

 

[chuckd4735]

In this case, define "maintain". If it's so onerous and frequent to cause tax increases, how can professional city engineers expect laypeople to manage this maintenance? If the HOA doesn't "maintain" it or the HOA sunsets the city will go in anyway. It seems like cities are speaking out of both sides of their mouth here; either maintenance is so challenging taxes will go up or it's so easy to maintain any ol' Karen can do it through a biannual HOA meeting.

Also, street repairs are often paid for by collective city funds so the SW resident is paying for the NE repair. What is the difference? Isn't clean storm water runoff a community concern?

What I would like to know, in all seriousness, is how MN cities can own and maintain these storm water ponds and still have cheaper property taxes than Iowa? And it's not like cities simply accept them, they actually *want* them.

Maintain would be mowing, for example. But there are also some big infrastructure pieces to this, so potentially there could be bigger items. You bring up a good point with roads, and I am not advocating one way or the other. I'm just pointing out that cities are funded by taxpayers.

I'm not sure how Minnesota works, but Iowa cities are mostly dependent on property taxes, while other States can also get sales tax.

 

[JM4CY]

Guess this is one of the benefits of building in small towns. No HOAs.

You guys should have a one time HOA payment to fund new uniforms so you can get rid of your god awful high school football jerseys.

 

[volclone]

A lot can depend on the bylaws of the HOA as to what the HOA has rights to enforce. Plenty of HOAs are completely benign like you mention and overall good for the neighborhood.

The bylaws and rules and regulations are also generally available for anyone when going through the purchase process. Review those and decide if you are comfortable with those.

Also, if you're past that point, most HOA annual meetings have pitifully low attendance. This is how you get some of the more annoying types on these boards. (I'm involved in one for a condo I rent out, I think there were 5 people in attendance including the 3 board members). However, it also means that it doesn't take many votes to put someone more reasonable in if you get a few neighbors together and vote one or more of yourselves onto the board.

This is spot-on. If you want to park your boat in your front yard, have thousands of plastic yard animals in front of your house, then don't live in an HOA. There's plenty of room out in the county.

 

[TrailCy]

I just checked my property tax statement and storm water management is $220/year. It's the same for every single family house in the county. Even with that my property taxes are still 50% cheaper than in Iowa. Not good or bad, just stating in the OP I think MN is trying to find solutions to the affordable housing challenege

 

[BCClone]

You guys should have a one time HOA payment to fund new uniforms so you can get rid of your god awful high school football jerseys.

Don’t hang that on me. I pushed. My oldest fought hard just to get helmet logos.

 

[BCClone]

I just checked my property tax statement and storm water management is $220/year. It's the same for every single family house in the county. Even with that my property taxes are still 50% cheaper than in Iowa. Not good or bad, just stating in the OP I think MN is trying to find solutions to the affordable housing challenege

The farmland taxes are a beatch in MN compared to Iowa.

 

[Nebraskaclone]

I'm on my neighborhood's HOA board. We maintain over 90 acres of property, including 2 private parks that are open to the public. We also have about 30 acres of restored Iowa prairie that we maintain and we are recreating an Iowa hardwood forest right now along our bike trail. Our goal is to maintain property values, while also facilitating community through activities like concerts and prairie walks.

There's no perks to being on the board. We pay the same dues as non-board residents and we don't throw parties for ourselves. I take thousands of pictures of all the plants, birds, and insects and volunteer hard to maintain it, along with other board members and contractors. We like it here! Houses start in the $300K range and were built in the 1990s to 2000s. Here's a few pictures:

 

[alarson]

I just checked my property tax statement and storm water management is $220/year. It's the same for every single family house in the county. Even with that my property taxes are still 50% cheaper than in Iowa. Not good or bad, just stating in the OP I think MN is trying to find solutions to the affordable housing challenege

Its definitely a bit complicated.

Ultimately the bills still have to get paid at the city level, but depending on what the state decides for revenue coming in and going back out to the cities in terms of things like income tax, how commercial and ag properties are taxed, etc, that can put the burden back on to cities and schools who often only have a couple ways of raising necessary funds (generally property taxes and various user/franchise fees).

One can certainly argue as to the spending cities engage in as well, but when police and public works eat up most of the budget for many cities there's little appetite for reducing either one of those so it becomes a revenue need.